ch15PPP - Chapter 15 Understanding Accounting and Financial...

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Understanding Accounting and  Financial Statements Chapter 15
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Explain the functions and identify the  three basic activities involving accounting. Describe the roles played by public,  management, government, and not-for- profit accountants. Identify the foundations of the accounting  system, including GAAP and the role of  the Financial Accounting Standards  Board (FASB). Outline the steps in the accounting cycle,  and define double-entry bookkeeping and  the accounting equation. 1 Learning Goals Explain the functions and major  components of the four principal  financial statements: the balance  sheet, the income statement, the  statement of owner’s equity, and the  statement of cash flows. Discuss how financial ratios are  used to analyze a company’s  financial strengths and weaknesses. Describe the role of budgets in a  business. Outline accounting issues facing  global business and the move  toward one set of worldwide  accounting rules. 2 3 4 5 6 7 8
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Accounting  is the process of measuring, interpreting,  and communicating financial information to enable  people inside and outside the firm to make informed  decisions. Accounting
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Open book management - sharing sensitive  financial information with employees and  teaching them how to understand and use  financial statements.  Viewing financial information may help them  better understand how their work contributes  to the company’s success. Outsiders use financial data to evaluate  investment opportunities. Open Book Management
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Financing  activities provide necessary funds to  start a business and expand it after it begins  operating. Investing  activities provide valuable assets  required to run a business. Operating  activities focus on selling goods and  services, but they also consider expenses as  important elements of sound financial  management. Business Activities Involving 
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This note was uploaded on 02/13/2012 for the course ART HISTOR 105 taught by Professor Kenfield during the Spring '11 term at Rutgers.

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ch15PPP - Chapter 15 Understanding Accounting and Financial...

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